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Petrol may not go beyond Rs 75/litre till election-end
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SME Times News Bureau | 23 Apr, 2019
Call it election time rationing or return of the administered price
mechanism regime, but the retail price of petrol may not cross the Rs 75
a litre-mark in Delhi, at least till the end of polling on May 19.
Official
sources said that public sector oil marketing companies (OMCs) have
been told in no uncertain terms to keep a check on the rising price
transport fuels - petrol and diesel - even though rise in global oil
prices and India's daily pricing mechanism makes it impossible to
control price rise.
OMCs have not been issued any written order
on petrol prices, but the government being its largest shareholder has
exercised its control to make sure that companies absorb a portion of
the hike in retail prices and prevent consumers from paying abnormally
higher prices, especially in the middle of election season.
"The
75 a litre-mark for petrol is a psychological level that does not affect
the comfort level of the Centre. Anything beyond this, could have an
adverse fallout for the ruling party during elections," an official
source said here.
When contacted, an official in a public sector
oil company denied getting any directive from the government to hold
petrol and diesel prices, but agreed that the retail prices of these two
petroleum products have not been revised for the last few days.
"Retail
price of petrol and diesel depends on a lot of factors and not just
global movement of crude and product prices," the official said.
In
the wake of a spurt in global oil prices, the price of petrol in Delhi
stood very close to the Rs 75 a litre-mark on Tuesday, at Rs 72.95.
The
price may rise sharply in the coming week as the US decision to
withdraw the waiver on Iran sanctions to major importing countries,
including India, is keeping global crude oil on the boil with prices
already touching $73 a barrel and rising.
The source said that
to test the new scheme, OMCs would absorb any hike in the petrol price
beyond Rs 75 only in Delhi. It could be extended to other parts of the
country, if the global prices continue to rise.
The OMCs are
already absorbing a portion of the hike. The price of petrol had
remained unchanged nationally for 6 consecutive days between March 30
and April 4 even though the global price movement required an increase
in retail prices.
Post April 4, the petrol retail price has remained unchanged between two to three days on numerous occasions till date.
The
Finance Ministry is unlikely to cut excise duty on petrol and diesel in
the middle of elections. In this situation, the best option available
is to cap the increase in retail price of petroleum products.
OMCs
are hoping that the oil market would correct itself, which would ease
the situation on prices and price controls could be withdrawn later.
State-run
fuel retailers Indian Oil Corp, Bharat Petroleum Corp and Hindustan
Petroleum Corp switched to daily price revision from a fortnightly
pricing system in June 2017 as the government sought to further the
pricing reforms in the sector.
The system, however, has now
become a big headache as constant increase in global prices are pushing
up retail petrol and diesel prices daily.
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Customs Exchange Rates |
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